Currency Analysis #13 – How To Use A Logarithmic Trendline To Predict The Price Of Ethereum (ETH)

This is Tai Zen again. And in this video guys, I want to do a quick price analysis and projection for Ethereum. I’ve been holding off on this even though many of you guys have been asking me what the price projection that I have for Ethereum. I previously did a price projection in the past where I had predicted the price of the Ethers will rise all the way up to 15 millibit, and it did so it was up here.

If you guys look at my first Ethereum price projection, I predicted that it was going to go up to the 15 millibit level which is about right around here and sure enough it did and I hope that some of you guys took profits on that and along the way.

I took profits along the way right here, right here, and some right here, and I even got back into it again. Speaking of taking profits guys, on my other monitor right here, I have some trades going on for the Euro, Dollar and…

Let me just show you guys here really quick, so thanks to Janet Yellen’s announcement today, so this is a live account guy, my FXCM account right here, it says real right there, so this is a real account.

As you guys can see, I’m up like $1189 today and minus commissions of $98, I got about a thousand profit right there and I’m waiting for the price to break above this blue line and I’m going to take some profits off when it gets up to there.

So just want to show you guys that really quick so that when… if I have to pause this video when the price gets up to there, you guys will know the reason why. So I’m going to do this price projection here really quick guys and hopefully, I’ll be able to hit the mark again like last time when I predicted that the price of Ethereum will hit the 15 millibit price mark.

And in case you guys are not aware, millibit is anytime it goes out to three decimal places right here, so this should be 11 millibit, this should be 15 millibit and this should be 19 millibit, and then 25 millibit.

Now my buddy Leonfu.com, when he invests into the Ethereum and stuff, he goes by all the altcoins, he goes by all the dollar. In my mind when I’m trading and doing this stuff, I think in terms of Bitcoin because then I know when I switch from the Ethereum to Factom and make/save to anything like that, my mind stays consistently the same.

It confuses me whenever I switch between US Dollars to Bitcoin. So in this video guys, I’m going to talk only in terms of Bitcoin and then maybe in a separate video, I’ll talk in terms of the US Dollar. Also, there’s something that’s a little bit different in this video that I’m going to do guys is that I’m going to do it in a log chart. This will be the first time that I’ve ever done. I did a video tutorial where I do the price projection based on a log chart in scatter instead of the regular linear charts that I use.

In case you don’t know the difference between the logarithmic charts and the linear chart, just google it on YouTube and you’ll find some video, and if you guys still don’t understand it just leave a comment section below and maybe in the future, I’ll make a separate video based on what’s the difference between using a log chart and using a linear chart.

But I typically use a log chart anytime I need to do a price analysis of something that jumps 5x 10x 20x at a time because that’s a more reliable way to have an accurate technical analysis and accurate price projection. So what I’m going to do is I’m going to start off by looking at the trend.

You can obviously see that Ethereum has been on an uptrend, I personally like to use the combination of a parallel channel, and I draw it from the lowest to the highest and then I just do a parallel channel, let me go ahead and make this line thinner.

So if you guys can see here, based on the current price projection… I’m just going to drop this horizontal line right there just to show you guys where the top of the body of that candle is real quick, and that was where I had originally projected the price to be and let’s follow up with that video and see where we’re going here.

Now basically guys, my policy for drawing a trend line is what I have the majority hits rule or the majority touches rule. So I touch it at the corner of these the bodies of these candles, and then I’m hitting it up here and notice that I’m not exactly touching the corners of the bodies, I’m just touching where the wicks are.

If you draw it to where it looks like that, you are welcome to do that, it’s not a really big deal, not in the big picture of things, and so I’m going to draw it right about right there. So that’s where it’s at and let me just move this so that it’s at the top of that.

Now if you guys will notice this price has gone up to about right here and it went sideways and jumped, and then went sideways and it jumped, and I want you guys to notice something. As we’re doing this I want you guys to pay attention to this, notice how when there’s a price jump right there in that is, it pulled back slightly and then it went sideways for 8 days before it shot back up again.

And then if you guys look at this one over here, you will notice that it shot up again and notice the distance from when the launch began to the launch end, it’s about the same. The launch begins somewhere around here and it comes up and then it went sideways about 2 weeks, and then notice the pattern here that when it came over here to this area right there, notice how it shot up again, notice how that each time the price shoots up, there’s more and more participants.

The reason why we know that is because as the participants are going up, it gets more attention from the cryptocurrency crowd, there are more people involved so there’s more people that are greedy and want to make money and there’s more people that missed out. That’s what we call the FOMO traders or the FOMO investors, the fear of missing out, so they missed out on this leg up and then they missed on this leg up.

So each time they missed it, they jump in and there’re more and more people that jump in. So once we got up to here, notice now there are three weeks that go by here. So we got one week here and then where prices did not go anywhere and it shot up and then two weeks here, and then price shot up and then three weeks here, and then price shot up.

Now if we look at this area where we’re currently at right after this price shot up right here, we can say that it began right here, or we can say that the begin up here, at the top, where we started counting. So 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16. So right there at the rate that we’re going, we’re probably looking at maybe possibly if this is one week, two weeks, three weeks, there’s possibly four or five weeks up here before the price shoots up again.

Now if we start to count from over here, 1 2 3 4 5 6 7 8 9 10 11 16 17 18 19 20 21 22 23 24 25, so from the peak of that to here, there’s about 25 days that have gone by where the price of Ethereum has not done very much. So if we’re projecting out a four-week, 4×7 will be 28, so this is right about the sweet spot, right around here we can start to expect something to happen.

Now I was expecting the price to take a shot up, you guys see this right here. It’s kind of like a hammer-like pattern, and if you guys have studied technical analysis for a while, you guys will have known. Let me magnify this so you guys can see it, you guys will know that when the price comes down like this hard then all the buyers came in and bought the price back up and pushed it back up.

Now if you split this candle at a 50% mark right, so from the high of that candle which is about right there to the low of that candle which is about right here, the 50% mark would be somewhere about there. So let me just do this dotted line so you guys can see the 50% mark is somewhere around the dotted line so the fact that the buyers came in and pushed it above that 50% mark of that length of that candle right.

That lets you know that the buyers were in control, and the buyers were more willing to pay a higher price to push the price back up. Now as this comes in and it comes up like this, this is a very strong sign, this is a very good pattern or signal or indicator however you want to call it, it doesn’t matter to me as long as you understand the mechanics of how price action works.

And if you’re wondering what kind of analysis I do, I do 100% strictly price action analysis. That’s how I trade, I do not trade off of indicators, I do not trade off of anything, I trade off of where the price action is at. Price action is where the buyers and sellers are doing. Who is in control? Are the buyers stronger or the sellers stronger at that moment in time?

And right here as we were hitting this trend line, if you guys will notice, we’re also hitting this support, see how sale price shot up? It pulled back down. If I move this line right here, you notice that there’s a really good support level in this whole area right here, in the world of price action trading, this is what we called an area of confluence right there.

So a confluence is an area where support and resistance meets a trend line, so this little area right here is an area confluence and that’s the lowest risk area. Anytime you see an area… On Wall Street, they call it an area of the confluence, on Main Street where you and I come from, we would call it an ‘intersection’.

So basically, this is the intersection of support against a trend line, so anywhere from between this green line right here, between the low of this candle right here, and the low of this, if you enter anywhere into this area, I don’t think that you have made a bad choice.

I think that’s probably a good sweet spot to get in. Now if it goes below this wick right here you probably might want to get out. So that’s where the stop-loss is at, somewhere below here, or if it starts to go against you, you get out. That’s not going to hurt you either the and it can also go back up, you can always jump back in. Don’t let the cost of commissions stops you from preventing losses in your account.

Now if the price goes up to guys, I am projecting this to come up to the other side. Now there are two specific price points that I have in mind. One of them specifically is at the 50 marks. Now, this is not a technical reason or anything.

I’m going to remove these lines. I’m going to say that if you got it anywhere right here, that would be good. Now if you miss the boat earlier guys and you want to jump on the bandwagon now and take this to the moon… If you get in right now you would not be wrong right now, because you would have gotten in right here, so here is fine.

The only thing is to make sure that you put your stops below here guys. Let me draw this and make it red so you guys understand where to put your stops. I would put my stops below this wick right here, and if you got in anywhere in here, we are taking it long from here and we’re looking to come up.

The first price target would be around 50. Now there is no technical reason why we would take it there. The only reason why I would put it there is because humans think in terms of whole even round numbers guys, so what happens is when price gets up to here, all the people that invested Bitcoins back during the ICO when Vitalik just released it, let’s say that they bought 1 Bitcoin, which is 2000, they invested half a Bitcoin, that would be 1,000 Ethers right there.

And if you take 1000 Ether times the 50 millibit right there, that would be 0.05, that means that person would have a whole even round number of 50 bitcoins, and for some people, for a lot of traders, especially beginners, they think in terms of whole even round numbers so when price hits there, it’s very very normal for them to take profits right there.

So just expect a pullback when it gets up to here. Another place that you can expect another pullback is right here at the high. Let me go ahead and draw that one in too, the previous high which is… I actually should colour code this one red also because it’s a resistance level.

When the price gets back up to this resistance level, there’s going to be some short-term traders that will take profits here, so expect a pullback here, right. Now if you are afraid to get in right here then obviously you would wait until you get here and then when the price pulls back then you would jump in on that pullback and light it up.

The only problem with getting in right here is that you have missed all this profit down here. So the lowest risk would be down here. Now ideally guys, when you get in right here, put your stop like right below the low of this, or this right here, somewhere right there. Now if you put your stop-loss below here as I mentioned earlier, the downside to that is obviously you’re taking a bigger loss on your trade or your investment, however, it gives you a wider stop.

If you don’t like to get stopped out a lot, you might want to put it here, but keep in mind guys, if it breaks below this all bets are off, you have got to get out. Do not light it out any lower than that. So to me, I like to make a lot of mistakes, usually, two-thirds of my trades do not make money, so that’s common for me to do that and one third makes money.

So the one third that does make money, I try to let it ride out as long as I can, but as soon as it goes against me, I try to get out as quick as I can also. So let me just do this. So right here guys, when the price winds up, that’s where your risk is at.

I wouldn’t even call this a price target, but your short-term place to take profits could be right here, for sure you want to take some profits off at the 50 marks up here, and then when the next place that I can see price going up is all the way up to the 100 marks up here, right there.

When the price gets up to that 100 millibit mark, I’m going to expect a huge pullback to come all the way back down to this trend line again. Now keep in mind guys that we have to update this trend line as we go along. I’m going to wait for this to run back up to here guys, and then after that, what I’ll do is we will have to readjust this trend line to accommodate wherever the turn in price is at.

So the turn’s right there then we’ll have to update the trend lines there and then we can move the other trend line out to the previous high right here, and then we can see where it went up there. So I’m not going to do that just yet until I see a break above this high and then I will readjust the trend line, guys.

So hopefully you guys will see that, so right now we’re at what I believe to be the beginning of the next launch up in price. So there go my targets guys and then we will readjust this trend line once the price has broken above this the previous high right there. So that’s where you would be guys.

Now let me show you whenever we trade, we always look at what the risk to reward is going to be guys and so we’re taking a long position here. Let’s just say that this is the risk that we take.

Let’s look at the worst case scenario where your risk is below the low of that hammer light candle right there. Let’s say that if your risk is there and you take profits at the previous high, I really don’t like this type of trade, I guess if you’re a short-term trader you can go for a one-to-one.

If you have a winning percentage where you are right on 50% of your trades or more, then I guess you can take this. I am not right on 50% of my trades, I’m right on about 1/3 of my trades.

So because of that, I need more reward, so what I would normally do is I’ll shoot for that target and then this stop-loss will be right here below the low of that. And what that does is it allows me to take that much risk for that much reward and even if I have to get out early, there are at least a one and a half reward to the one unit of risk that I’m taking.

Now if I come up to here, then that would be ideal right there because that’s like three to one, and then when I let it run up to here, that would be even better because there’s almost like a 6 units of reward to one unit of risk that I’m taking right there. So hopefully guys, this helps you guys out in some way for sure.

When you guys get to 100 here, you definitely want to take some type of profit off the table, if you want to leave a little bit left, you’re welcome to do that on the table in case it goes to the moon.

But I would definitely take some profits off at the 100 millibit marks right here because you notice what happened last time when I made that call, the prediction that there was going to be a profit, it’s only got to 150. Notice what happened when they got there, see the big pullback here, and depend upon how much Ethers you have, you could suffer emotionally on that.

Now this is on a log chart guys, when I switch over and do the same analysis and my price prediction using a linear chart, expect the targets to be slightly different and then also when I do on the US dollar also expect it to be different, so I’ll try to give you guys anywhere between three different price targets so that you’ll know what the long-term outlook of Ethereum is going to look like.

So just a quick wrap up guys, make sure you get out at least bare minimum right here at 21 millibit when it breaks below that, you want to wait until the price gets back up before you jump back in. Now I personally would put my stop-loss just right below this which is at 27 millibit, probably put it like at 24 or 26 somewhere around there. And then your first short term…

And this is not even really a price target, it’s just a little quick profit right here at the previous high of 37 millibit, and then definitely your first price profit target would be at 50 millibit, and the second major target would be at 100 millibit.

And so thanks for watching this video guys I hope that helps you guys out. I’ve been getting a ton of emails and text messages, I mean private messages from people talking about the price projection and what I expect the price to do and there’s my projection. I still got this Forex trade still going on, notice how it shot up and it went sideways, I was hoping that it would pop up right here guys, but I have to cut this video short and maybe I’ll let you guys know later on what happened in this trade.

But so far, thanks to the silly announcement that Janet Yellen made today, every time she makes one of these announcements, you guys know that she’s doing it so that her crony buddies can benefit from it.

And this is the beauty about trading cryptocurrencies guys, is that we don’t have to have the money, and we don’t have to be best friends with Janet Yellen like you have to when trading like something like the Forex here. With cryptocurrencies guys, anyone can trade it and anyone can profit from it and anyone can benefit from it.

So this today has been a good day trading the euro here thanks to Janet Yellen guys, so I’m always grateful for that whenever someone helps make money right. So look at that, see that little gap right there, maybe this will be like a bonus analysis here guys, but see a little gap right there, that’s a good sign that price is going to head back up.

Now if price shoots back up to here guys, what I’m going to do is I’m going to take some profits once it crosses over this 1307, because if you guys look at it from a long-term perspective here…

As soon as it breaks to get to that level, I’m looking to take profits right there and that’s where it’s at right there, 1307. But I’m going to go ahead and end this video guy and maybe I’ll give you guys an update later on what happened in this Forex trade, but so far today has been a good day, any time you make a thousand bucks in one day, it should be grateful.

So back to this, thanks for watching this video guys. If you guys like it these videos that I’m doing guys, let me know, also I want to thank everyone that has joined our channel and subscribed to our channel guys. We are looking to rebrand this channel because I’ve noticed that now that we have finally cracked a thousand subscribers.

There’s been a lot of traffic and a lot of views and everything to Leonfu.com and myself and the rest of my team, we’re looking at figuring out a way to rebrand this channel so that it’s more focused just 100%. In the past if you guys have been following for the last couple of years, I talked about some stuff, about the legal system, the prison system in America and things like that.

But I think that moving forward, we’re just going to focus on just one thing and just focus on the cryptocurrencies because it appears that those are the majority of our audience, so we like to invest in it and we like to share what we do with other people.

Oh just let me show you guys this really quick as I’m running my mouth here. This is what happened to the Euro, so you guys see how it shot back up right there guys. Now keep in mind guys, please always have a profit target in mind when you are trading guys. I get people all the time asking me on trading view when they should take profits and when they should not.

I’m going to let you guys know I am going to take profits when it crosses this as soon as it pops up above this. I’m going to take some of the profits off. I got like two losses on so I’m going to take about 75% of that off and when I take 75% of that off, I’m going to let the rest of it run all the way to the top here.

Now normally I would take profits on the other side of this trend line, but I know that from a long-term perspective from over here where 1307 is at right there, I know that there’s going to be some people that are going to want to take profits right about here when it gets here, and so because of that I’m going to go ahead and take profits a little bit off when it comes up to here.

So thanks for watching this video guys. So far I’m up $208 so that means that when it gets up to here I’ll probably take about $200 off by the time it gets up here guys. So thanks for watching this video guys and let me go ahead and end this video right now so I can focus on my Forex trade and then I’ll look forward to seeing you guys in a future video.

If you guys like these types of videos, give me a thumbs up. If you guys don’t like give me a thumbs down, so I don’t waste time making it. And then if you guys haven’t subscribed to my channel yet, make sure you do and that way Leonfu.com and I can share more information with you guys.

We got a couple more traders on my team that’s in the background and you guys haven’t heard from, and haven’t seen yet. You guys met Eric G but pretty soon I’m bringing my whole team on here guys, and we have lots of fun, so make sure you guys subscribe to my channel. I look forward to seeing you guys in the future video.

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